Special session begins, tough decisions ahead

The West Virginia Legislature goes into special session today to try to work out a budget for the next fiscal year beginning July 1. It’s going to be difficult.

Governor Justice and the Senate have coalesced around a framework of lower personal income tax rates, but higher taxes on business and consumption. Senate President Mitch Carmichael supports the deal and believes it will pass his chamber.

The House of Delegates is a different matter.

Speaker Tim Armstead supports lower income taxes, but says the average 20 percent reduction in rates is too steep, prompting the increases in the consumer sales tax and corporate net income taxes to make up for lost revenue.

All signs point toward the Senate approving the necessary revenue measures to finance the budget proposal, which will then be voted down in the House.

That prompts the question, why even call lawmakers to Charleston for a special session at a cost of approximately $35,000 a day when there’s not an agreement among the Governor, the Senate and the House? Why not wait until they have consensus and then meet?

The answer is that when there are hard choices, at some point you have to make a decision. Peter Bergman writing for the Harvard Business Review says it’s important to set a timer when trying to make a tough decision.

“If the issues on the table have been reasonably vetted, the choices are equally attractive, and there is still no clear answer, then admit that there is no clearly identifiable right way to go and just decide,” Bergman writes.

His principle is not a perfect fit here; House leaders have been shut out of most of the budget talks with the Governor for the last two weeks and the available choices are not “attractive.”  They are tough. However, the best way to move along the budget debate is to have a vote and get lawmakers and the Governor on the record.

If majorities in the Senate and House both support the plan (unlikely), then we will have a budget.  If the House rejects the plan (likely), then lawmakers’ positions on the proposal will be more defined and budget discussions can begin again.

It’s not surprising that we are at this juncture. Let’s say the state’s economy was booming and revenue was coming in well ahead of estimates. Then the arguments would be about how to spend the windfall or where to cut taxes.  Those are easy decisions.

However, when the economy slows down and the budget is tight, the decisions become more difficult. What programs should be cut?  What taxes should be increased?  What investments or tax changes should the state make to foster economic growth?

The politicians who have to make these decisions are human, and it is natural if the next election is in the back of their mind.  That anxiety creates fear and fear can impair the ability to make rational decisions.

But those tough choices still have to be made, and that begins today.

 

 

 

 





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